Investment Psychology

Author: (American) John Nor censinger, translated by Liu Fengyuan, Zhang Chun'an
Publisher:
Publish Date: 2005-05-01
Features: Wall Street has an old saying, "The market is driven by two forces: greed and fear." This statement is not wrong, but it is too simplistic. Human thoughts and emotions are very complex, and the four words "greed and fear" cannot fully summarize the psychological factors that influence investment decisions. This book is a monograph that delves into this fascinating and highly important topic. Traditional finance focuses on analyzing the analytical tools investors use to optimize expected risk and return, so few textbooks cover the subject of investment psychology. Traditional finance has achieved significant results, developing analytical tools such as asset pricing models, portfolio theory, and option pricing theory. Investors should apply these analytical tools in their investment decision-making process, but they often do not, because human psychology has a much greater impact on investment decisions than these traditional financial theories. Unfortunately, psychological biases often affect people's ability to make correct investment decisions. By understanding psychological biases, people can overcome them and improve their wealth level. This book provides a comprehensive introduction to investment psychology, describes psychological biases, explains their impact on investment decisions, and cites academic research findings to prove that investors indeed exhibit psychological biases.